2564610
Descripción
Test por Claudia Voin, actualizado hace más de 1 año
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Creado por Claudia Voin
hace alrededor de 9 años
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Pregunta 1
Pregunta
All of the following are inventory costing methods except for
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specific unit cost method
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weighted-average cost method
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FIFO cost method
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LIFO cost method
Pregunta 2
Pregunta
This method of accounting for inventory assumes that the units acquired earliest are sold or used first
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specific identification method
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first in, last out
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last in, first out
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first in, first out
Pregunta 3
Pregunta
This method of accounting for inventory assumes that the units acquired most recently are sold or used first
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specific identification method
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first in, last out
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last in, first out
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last in, last out
Pregunta 4
Pregunta
The cost at which an inventory item could be acquired today is the
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market price
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replacement cost
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acquisition cost
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none of the above
Pregunta 5
Pregunta
Inventory costing methods place primary reliance on assumptions about the flow of
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goods
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costs
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resale prices
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values
Pregunta 6
Pregunta
The selection of an appropriate inventory cost flow assumption for an individual company is made by
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the external auditors
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Canada Revenue Agency
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the internal auditors
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management
Pregunta 7
Pregunta
The primary goals of inventory management include
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maintaining a sufficient quantity of inventory to keep customers satisfied
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maintaining a sufficient quality of inventory to keep customers satisfied
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minimizing the costs associated with maintaining inventories
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all of the above
Pregunta 8
Pregunta
A company just starting in business purchased three inventory items at the following prices: first purchase, $80; second purchase, $95; third purchase, $85. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be
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$25
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$35
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$20
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$10
Pregunta 9
Pregunta
Which of the following would not be affected by the choice of costing methods?
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net sales
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cost of goods sold
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gross profit
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net income
Pregunta 10
Pregunta
In periods of rising prices, the inventory method which results in the highest gross profit is
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the FIFO method
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the LIFO method
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the average cost method
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not determinable
Pregunta 11
Pregunta
In a period of declining prices, which of the following inventory methods generally results in the lowest balance sheet figure for inventory?
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average cost method
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LIFO
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FIFO
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need more information to answer
Pregunta 12
Pregunta
Which inventory method generally results in cost allocated to ending inventory that will approximate their current cost?
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LIFO
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FIFO
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average cost method
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whichever method produces the highest ending inventory figure
Pregunta 13
Pregunta
The managers of Sera Company receive performance bonuses based on the net profit of the firm. Which inventory costing method are they likely to favour in periods of declining prices?
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LIFO
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average cost method
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FIFO
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physical inventory method
Pregunta 14
Pregunta
In periods of rising prices, LIFO will produce
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higher net income than FIFO
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the same net income as FIFO
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lower net income than FIFO
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higher net income than average cost method
Pregunta 15
Pregunta
Considerations that affect the selection of an inventory costing method do not include:
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tax effects
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balance sheet effects
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income statement effects
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perpetual versus periodic inventory system
Pregunta 16
Pregunta
The LCM rule for inventory is an example of the application of
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conservatism principle
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historical cost principle
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materiality principle
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economic entity principle
Pregunta 17
Pregunta
Which of these would cause the inventory turnover ratio to increase the most
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increasing the amount of inventory on hand
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keeping the amount of inventory on hand constant but increasing sales
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keeping the amount of inventory on hand constant but decreases sales
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decreasing the amount of inventory on hand but increasing sales
Pregunta 18
Pregunta
Wonder Corp. failed to record the purchase of merchandise on account. As a result, ending inventory was understated. What is the effect of these errors on assets, liabilities, capital, and net income, respectively?
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understated, understated, no effect, no effect
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understated, understated, understated, understated
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understated, overstated, overstated, understated
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overstated, overstated, understated, overstated
Pregunta 19
Pregunta
The specific ID method would probably be most appropriate for which of the following goods?
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boxes of brass 4-inch drywall screws at Home Depot
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bottles of suntan lotion in Wal-Mart's central warehouse
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sets of tires at the Goodyear plant
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diamond necklaces at a Tiffany's & Co. jewelry store
Pregunta 20
Pregunta
Gerber Department Store utilizes the retail inventory method. Gerber's beginning inventory cost $140 000 and retailed for $280 000. Purchases for the period amounted to $390 000 and were priced to sell at twice that amount. Sales for the period, at retail, were $600 000. How much is the cost of ending inventory?
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115 000
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150 000
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230 000
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300 000
Pregunta 21
Pregunta
Which inventory costing method generally results in the most recent costs being assigned to ending inventory?
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LIFO
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FIFO
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average cost
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all of the above
Pregunta 22
Pregunta
The 2014 records of Thompson Co. showed beginning inventory, $6 000; cost of goods sold, $14 000; and ending inventory, $8 000. The cost of purchases for 2014 was
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12 000
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10 000
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9 000
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16 000
Pregunta 23
Pregunta
Which of the following statements is true with regards to all inventory costing methods?
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The ending inventory balance and cost of goods sold move in the same direction
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The ending inventory balance and cost of total assets move in the opposite direction
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The ending inventory balance and net income move in the same direction
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all of the above
Pregunta 24
Pregunta
An adjustment to ending inventory under the LCM rule would be most likely to be recorded by a company that sells
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plastic storage containers
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paper clips
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body lotion
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designer clothes
Pregunta 25
Pregunta
When the LCM rule requires an inventory adjustment
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the adjustment usually, but not always, reduces the book value of inventory
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the write off is usually reported as a selling expense or part of cost of goods sold
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the inventory adjustment is recorded in a contra-revenue account called sales allowances
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all of the above
Pregunta 26
Pregunta
A rising balance in the inventory account and a falling inventory turnover ratio implies that the inventory buildup is occurring because
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goods are not selling as fast as anticipated
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the company is expecting to sell more in the future
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goods are selling, but it is taking longer to collect payment
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goods cannot be shipped fast enough
Pregunta 27
Pregunta
Which of the following companies would be least concerned about a low inventory ratio?
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A fish market selling fish
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A hardware company selling drywall screws
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A dairy company selling butter and milk
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A semiconductor company selling microchips
Pregunta 28
Pregunta
Because LIFO uses older costs for inventory, in times of rising prices:
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LIFO results in a higher book value of inventory and lower inventory turnover ratio than FIFO
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LIFO results in a lower book value of inventory and a lower inventory turnover ratio than FIFO
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LIFO results in a higher book value of inventory and a higher inventory turnover ratio than FIFO
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LIFO results in a lower book value of inventory and a higher inventory turnover ratio than FIFO
Pregunta 29
Pregunta
Which of the following inventory cost flow methods would an auto dealership most likely use for its new car sales?
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FIFO
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LIFO
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AVG Cost
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Specific Identification
Pregunta 30
Pregunta
In an inflationary environment in Canada, which inventory cost flow method will require the smallest cash payment for income taxes?
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FIFO
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LIFO
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AVG Cost
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not determinable
Pregunta 31
Pregunta
Carrington Company applies the LCM rule to each individual item in its ending inventory. The company determines that it must write down its inventory by $4 000. Which of the following answers reflects how this would effect the statements? (Assets = Liabilities + Equity; Revenue - Expenses = Net Income)
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(4 000) = n/a + (4 000); n/a - 4 000 = (4 000)
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(4 000) = 4 000 + n/a; n/a - 4 000 = (4 000)
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(4 000) = n/a + (4 000); n/a - n/a = n/a
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4 000 = n/a + 4 000; 4 000 - n/a = 4 000
Pregunta 32
Pregunta
An overstatement of ending inventory results in an
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overstatement of cost of goods sold
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overstatement of gross profit
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overstatement of sales revenue
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understatement of net income
Pregunta 33
Pregunta
The following info is from the 2014 accounting records of Odom Company: Sales Revenue = $625 000; Beginning Inventory = $254 000; Purchases = $366 000; Historical Gross Profit Margin = 40%
What is the estimated gross profit?
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$156 000
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$250 000
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$269 000
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$375 000
Pregunta 34
Pregunta
The ? principle states that a company should use the same accounting methods and procedures from one period to the next.
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conservatism
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consistency
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full disclosure
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materiality
Pregunta 35
Pregunta
An undiscovered inventory error usually affects:
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two reporting periods
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the balance sheet of the first period but not the balance sheet of the second period
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the income statements of both periods
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all of the above are true
Pregunta 36
Pregunta
When using the FIFO inventory method, the most recent inventory costs will be found on the
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balance sheet
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income statement
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statement of OE
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cash flow statement
Pregunta 37
Pregunta
Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using FIFO.
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150
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200
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350
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none of the above
Pregunta 38
Pregunta
Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using LIFO.
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200
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350
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450
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none of the above
Pregunta 39
Pregunta
Use the following info for this question: Beginning Inventory: 10 units, $10 each; January 20 Purchase: 10 units, $20 each; January 30 Purchase: 5 units, $30 each. 15 of the 25 are sold. Calculate cost of goods sold using average cost.
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200
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270
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300
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none of the above
Pregunta 40
Pregunta
In a period of rising prices, all of the following statements are true regarding LIFO except:
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most recent inventory costs are allocated to cost of goods sold
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ending inventory is generally undervalued
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the ending inventory figure represents replacement value
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all of the above are true
Pregunta 41
Pregunta
In a period of falling prices, all of the following statements are true regarding FIFO except:
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the units purchased earlier in the period are allocated to cost of goods sold
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the lower priced units are allocated to ending inventory
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the ending inventory figure represents replacement value
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net income is generally higher
Pregunta 42
Pregunta
Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the LIFO method?
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$300
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$1 875
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$425
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$2 000
Pregunta 43
Pregunta
Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the AVG cost method?
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$375
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$1 955
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$2 125
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$345
Pregunta 44
Pregunta
Use the following information:
May 1 Beginning Inventory: 50 units @ $20
May 7 Purchases: 40 units @ $25
May 18 Sales: 60 units
May 22 Purchases: 10 units @ $30
May 29 Sales: 25 units
What is the ending inventory using the FIFO method?
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$300
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$1 875
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$425
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$2 000
Pregunta 45
Pregunta
Use the following info to compute gross profit. Sales price of merchandise sold to customers is $10 000, beginning inventory $1 000, inventory purchases $4 000, and cost of goods sold $3 000.
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$2 000
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$5 000
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$7 000
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none of the above
Pregunta 46
Pregunta
Errors may arise in the process of counting inventory. Assume some inventory is accidentally counted twice. All of the following statements are true except:
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this accounting period's cost of goods sold will be overstated
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this accounting period's net income will be overstated
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next accounting period's net income will be understated
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next accounting period's ending OE will be correct
Pregunta 47
Pregunta
Which inventory method generally best follows the matching rule?
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whichever method is used for tax purposes
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average cost
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FIFO
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LIFO
Pregunta 48
Pregunta
During periods of declining prices, which inventory method probably will result in the lowest ending inventory?
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average cost
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specific ID
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FIFO
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LIFO
Pregunta 49
Pregunta
Insurance companies often verify the extent of inventory lost or destroyed by applying the
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specific ID method
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retail method
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LCM method
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gross profit method
Pregunta 50
Pregunta
Which of the following statement is true of inventory errors?
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if the error counterbalances, it does not have to be disclosed
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a counterbalancing error impacts on two income statements and one balance sheet
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a counterbalancing error impacts on two balance sheets and one income statement
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none of the above are true
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